The Friedman Doctrine, also known as the stockholder theory, is an idea proposed by economic theorist Milton Friedman, which states that a company's only responsibility is to increase its profits.
Friedman argued that a company should have no "social responsibility" to the public or society because its only concern is to increase profits for itself and for its shareholders. He wrote about this concept in his book Capitalism and Freedom. In it he states that when companies concern themselves with the community rather than focusing on profits, it leads to totalitarianism.
In the book, Friedman writes: "There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud."
The idea of the stockholder theory, some argue, is inconsistent with the idea of corporate social responsibility at the cost of the stakeholder. For example, a company donating services or goods to help those hurt in a natural disaster, in some ways, may be considered not taking action in the best interest of the shareholder. Some may argue that goods provided to society in a time of need builds further allegiance to a corporation and in theory, meeting the stockholder theory's requirement to look in the best interest of the stockholder.
The Friedman Doctrine is controversial. In left-wing social activist Naomi Klein's book The Shock Doctrine, she criticizes the theory, saying most citizens become impoverished while corporate elites gain enormous wealth.
- James Grainger (September 9, 2007), "It's all Friedman's doing" (reviewing Klein's The Shock Doctrine)